Mark,
I also sold LSI the day after earnings were announced at 36. To me LSI in this range given its current fundamentals becomes more than fairly valued. I still think LSI is a great long term prospect. I look for Intel to earn between 8.5-9 EPS in 1997 and I apply a P/E of 25 to get what I believe will be a price around 200-225. In other words, I don't look at INTC is a momentum play, I look at it as a value play. IMO, the stock remains substantially undervalued relative to other tech stocks (not relative to history which I think is irrelevant). I think WS has finally started to understand Intel's significance in the technology revolution and it will easily affor INTC a P/E of 25 going onward. I don't plan on selling INTC until something changes fundamentally within the company or the industry. I fully expect to retire with Intel in my portfolio, however, stranger things have happened. I suspect that any correction in INTC even as much as 25-30% would be very short lived as I and others would gladly love to have this opportunity to add to our position. Being conservative, I don't worry about quarter to quarter stock price fluctuations. I tend to think in terms of years. That is why I continue to hold PTEC, not because I think it is about to explode this quarter or next quarter but because I think it is undervalued and will pay off very well in the long run. I do, however, think there is some chance of PTEC taking off in the next quarter of two or I wouldn't be holding. I just think it might take a little longer than some think. I am not willing to take the chance that I am wrong, however, and miss a quick 15-20% pop and that is why I am in it now.
<<Phoenix is that the stock market is event-driven and there aren't any events that will drive the price up.>>
Actually, I only think this is true in the short term. In the long term I think the market is driven by fundamentals. However, the market often takes time in recognizing fundamentals and and therefore the the stock price can lag far behind the fundamentals for long periods of time.
I tend to be very fudamentally oriented, so I don't sell stocks regardless of how fast and how big they run up. I can't say that I haven't been tempted to sell INTC at various points over the last 4 years but I have resisted and been well rewarded. One thing is for sure, Intel will trade significantly lower and it will trade significantly higher some time down the road. Following the Peter Lynch school of thought, I don't try and time these fluctuations but rather constantly re-evaluate to see if I think the stock/company is still fundamentally sound. I definitely seem to be in the minority on SI. Not many people seem interested in buying a stock and holding for 10 or 20 years or until something changes fundamentally. Actually, I hope PTEC proves to fall in this portion of my portfolio (i.e. core hodling).
Good luck to all,
FF |
